Suppose the subject's net operating income is $100,000, the direct capitalization rate of the land is 3.5%, the direct capitalization rate of the improvementsis 6.0%, and the value of the improvements is $750,000. What is the overall value of the subject property (round to the nearest thousand)?A. $2,321,000ⒸB. $2,036,000OC. $1,571,000OD.$1,286,000

Net Operating Income means that income which is earned by the investor from his investment after…

Answered: Suppose the subject's net operating…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Griffin's goat farm, Inc has sales of $666,000 costs of $328,000, depreciation expenses of $72,000 interest expense $46,000 and a tax rate of 24 percent. what is the taxable income? a. $167,200 b. 220,000 c. 266000 d. 52800 e. 292000
The followings are cash flows of two mutually exclusive projects: Projects I and II. Project I: Year 0: -200,000, Year 1: 50,000, Year 2: 100,000, Year 3: 150,000, Year 4: 40,000 Project II: Year 0: -100,000, Year 1: 40,000, Year 2: 90,000, Year 3: 30,000, Year 4: 60,000 The cost of capital for the company is the same as what you have estimated in the previous question (use a round number, round to the closet integer). Which project should the company select based on the following criteria? Cost of Capital = 10.9% a. Payback period (The critical payback period is 2.5 years) Payback(Project 1)= Payback(Project 2)= Which one should you choose? (Better) b. Net present value NPV(Project 1)= NPV(Project 2)= Which one should you choose? (Better) c. Internal Rate of Return IRR(Project 1)= IRR(Project 2)= Which one should you choose? (Better) d. Profitability Index PI(Project 1)= PI(Project 2)= Which one should you choose? (Better)
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A. ACQUISITION COSTS Mr. Ardi acquired land at a cost of Rp4.200.000.000 on April 1, 2019. In addition to this cost, he had to pay the following expenses: a. Commission fee, 2% from the land price, Rp84,000,000 b. Land acquisition tax Rp12,000,000 c. Removal cost of old (unused) building Rp20.500.000. Mr. Ardi received Rp17.000.000 from the sales of salvage materials. d. Rpl10.000.000 to build a fence e. Rp215.000.000 to build a parking lot Instructions: Prepare the journal entries for the above transaction! (4%)
A Property is expected to have 5 Year NOI flow of $10,000, $12,000, $15,000, $18,000, and $10,000 and a final (year 5) sale price of $90,000. Using capitalization rate of 12% what is the estimated market value of the property? 97,354 104,664 87,641 100,919 90,724
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ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly attributable costs incurred was P250,000. If ABC were to resell this land now, it would incur cost to sell of P400,000. The following rates were gathered. Weighted average cost of capital 15% Land average price increase per year 18% Inflation rate 4% Required: Assuming that ABC plans to sell the asset by the end of the fifth year, compute the following: 1. Intrinsic value
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The acquisition price of a property is $380,000. The loan amount is $285,000. If the property’s NOI is expected to be $22,560, operating expenses $12,250, and the annual debt service $19,987, the debt coverage ratio (DCR) is approximately equal to
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A bridge that was constructed at a cost of P 75,000 is expected to last 30 years, at the end of which time its renewal cost will be P 40,000. Annual repairs and maintenance are P 3,000. What is the capitalized cost of the bridge at an interest of 6%? 133,433.00 50,000.00 125,000.00 140,625.00 75,948.67 58,433.00

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